His half-brother, David Carradine is best known for his role as Kwai Chang in the Kung Fu TV series, and more recently as the title character in Kill Bill. His brother, Robert Carradine, appeared in the Revenge of the Nerds series of films and has had other significant roles. All three Carradine brothers appeared as the Younger brothers in Walter Hill's 1980 film The Long Riders, with Keith playing Jim Younger. Carradine appeared again for Hill in 1981's Southern Comfort.

His daughter by actress Shelley Plimpton is Martha Plimpton, who was conceived when her parents appeared together in the Broadway musical Hair.

Keith Carradine's first notable film appearance was in director Robert Altman's McCabe & Mrs. Miller in 1971. He went on to play one of the principal characters in Altman's critically acclaimed 1975 movie Nashville and his song from that movie, "I'm Easy", was a popular music hit in 1976. Carradine won an Oscar for Best Original Song for writing the tune.

He has worked several times in the offbeat films of Altman's protégé Alan Rudolph, playing a disarmingly candid madman in Choose Me (1984), an incompetent petty criminal in Trouble in Mind (1985) and an American artist in 1930s Paris in The Moderns (1988). He also had a cameo role as Will Rogers in Rudolph's 1994 film about Dorothy Parker, Mrs. Parker and the Vicious Circle. Carradine co-starred with Daryl Hannah as homicidal sociopath John Netherwood in the 1995 thriller The Tie That Binds.

Other works include Emperor of the North Pole (1973), Pretty Baby (1978), Chiefs, a television miniseries in 1983, and My Father My Son, a television movie in 1988,

In 1984 he appeared in the video for Madonna's single Material Girl. During the shooting of the video Carradine and Madonna had a short affair.

In the early 90's he played the lead role in the Tony Award winning musical, the Will Rogers Follies. He was nominated for Broadway's 1991 Tony Award as Best Actor (Musical) for this role.

More recently, Keith Carradine enjoyed a starring role on the ABC sitcom Complete Savages, and played Wild Bill Hickok in the HBO series Deadwood. He has also appeared as a host of the factual Wild West Tech show on the History Channel.

In the 2005 miniseries Into the West, produced by Steven Spielberg and Dreamworks, Carradine played Richard Henry Pratt.

He has two children by his ex-wife Sandra Will Carradine (married 6 February 1982, separated 1993): Cade Richmond Carradine, born on July 19, 1982, and Sorel Johannah Carradine, born on June 18, 1985.